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An IRA is a special "bucket of money" that lives on the other side of a tax "island". To move money from one island to another, something happens taxwise. Moving money to the IRA "island" or the nonprofit "island", you get a tax deduction. Moving it from the IRA "island" to a Roth "island" you pay some tax. That happened when you put the $500 into the ...


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In general, one should be taking one's distributions based not just on one's current tax bracket, but also on what one thinks one's future tax bracket will be. For instance, if someone is currently in the 22% tax bracket, but thinks they'll be in the 12% bracket later, they should not take any distributions now. In your case, if I understand the formula ...


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@Aganju If OP converts to Roth, that money is still taxed. Albeit, the tax rate is based on current tax bracket which may be lower than future bracket and all gains and distributions are tax free in the future. Think that should be mentioned. As @pete-b mentioned, your beneficiaries are likely to receive a large portion and this too should be considered if ...


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There are no restrictions as to when you can purchase bonds or stocks for money that is properly in a SEP IRA account. You can buy now or let the money sit there and buy in the future. Why do you ask this question? Is there some doubt as to whether you are able to put money into the SEP IRA account in the first place?


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You should consider the option of converting a chunk into a Roth account every year (instead of into a taxable account). The (small) disadvantage is that it is basically 'stuck' for five years; the advantage is that any further gains are tax-free.


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From here: "For anyone who has not already reached age 70.5 by the end of 2019, the new required beginning date will be 72 for RMDs..." "...So, if you turn 70.5 by the end of 2019, you will need to start taking RMDs for 2019. The first one needs to come out by April 1, 2020. However, if you turn 70.5 after Jan. 1, 2020, you now won’t be required to take an ...


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"Each gets a bill for $ 7000 from the other, and pays it. Both use the self-employed income and put it completely into their IRAs, which makes it tax-deductible, and therefore irrelevant for any tax filings." This is not true - the amounts will eventually be taxed, when they retire. For simplicity imagine you do this the year before you retire - you will be ...


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I'm not a lawyer or CPA or anything so I won't say it's totally legal. But here are some problems. First, it's unclear from your description (especially the "mowing each other's lawn") idea whether in your scheme the work involved is actually worth $7000. If you mow someone's lawn once and they pay you $7000 so you can contribute to your IRA, that could ...


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Yes, if it will enable the deduction and not incur any IRA penalty (per your tax adviser), you should take the distribution. If you leave the $50k in the IRA, the beneficiaries will eventually pay tax at ordinary income rates on the $50k and all earnings from it. If you invest the $50k outside the IRA, taxes will be owed only on the earnings, likely at ...


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I do that every year. There is no limit on the amount you convert; the only consequence is the taxability - you will have to pay taxes for the gains you converted. At the end of the year, the provider will send you the details that you need to include in your tax filing. Note that this is independant of the tax status of the original 6000 - if they were pre-...


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Leaning toward NO for the amount received via 1099-MISC for Tribal Distributions and listed on 1040 Schedule 1 line 21 as: INDIAN GAMING PROCEEDS INDIAN TRIBAL DISTRIB NATIVE AMERICAN DISTRIB The section on Compensation in Pub 590-A Contributions to Individual Retirement Arrangements (IRAs) lists out what is and is not considered compensation: What Isn’...


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https://www.irs.gov/retirement-plans/ira-year-end-reminders You can make 2019 IRA contributions until April 15, 2020. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits For 2020, your total contributions to all of your traditional and Roth IRAs cannot be more than: $6,000 ($7,000 if you're age ...


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